Figure 7.1 Alt text for Figure 7.1: In figure 7.1, a graph comparing capital per hour worked and real GDP per hour worked.
Long description for Figure 7.1: The x-axis is labelled, capital per hour worked, K/L, with values 40,000 and 60,000 marked.The y-axis is labelled, real GDP per hour worked, Y/L, with 0 at the vertex.3 concave curves, each originating from the vertex are shown.4 points A, B, C, and D are plotted such that point A has 40,000 as the x coordinate, and points B, C, and D have 60,000 as the x coordinate.The 3 curves pass through these points.The curve labelled, Production function 1, passes through point B.The curve labelled, Production function 2, passes through points A and C.The curve labelled, Production function 3, passes through point D.
-Refer to Figure 7.1.Technological change is illustrated in the per-worker production function in the figure above by a movement from
A)A to B.
B)B to C.
C)B to A.
D)D to C.
E)D to A.

Question

Figure 7.1  Alt text for Figure 7.1: In figure 7.1, a graph comparing capital per hour worked and real GDP per hour worked.
Long description for Figure 7.1: The x-axis is labelled, capital per hour worked, K/L, with values 40,000 and 60,000 marked.The y-axis is labelled, real GDP per hour worked, Y/L, with 0 at the vertex.3 concave curves, each originating from the vertex are shown.4 points A, B, C, and D are plotted such that point A has 40,000 as the x coordinate, and points B, C, and D have 60,000 as the x coordinate.The 3 curves pass through these points.The curve labelled, Production function 1, passes through point B.The curve labelled, Production function 2, passes through points A and C.The curve labelled, Production function 3, passes through point D.
-Refer to Figure 7.1.Technological change is illustrated in the per-worker production function in the figure above by a movement from
A)A to B. 
B)B to C. 
C)B to A. 
D)D to C. 
E)D to A.

Quizplus · Accepted Answer

The movement from point B to C along the Production function 2 curve indicates a technological change as it results in an increase in real GDP per hour worked (Y/L) with the same amount of capital per hour worked (K/L). Therefore, choice B is the correct answer. Movement from A to B or D to C represents an increase in capital per hour worked, while movement from D to A or B to A represents a decrease in both capital and real GDP per hour worked.

Figure 71 Alt Text for Figure 7